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Gujarat Gas - RU4QCY2010-010311

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					                                                                                               4QCY2010 Result Update | Oil & Gas
                                                                                                                                 March 1, 2011



 Gujarat Gas                                                                                    ACCUMULATE
                                                                                                CMP                                       `375
 Performance Highlights                                                                         Target Price                              `418
  Y/E Dec. (` cr)                   4QCY10 3QCY10 % chg (qoq) 4QCY09 % chg (yoy)                Investment Period                 12 Months
  Net Operating Income                  514          507             1.3      386       33.0
  EBITDA                                129           90            43.1       77       68.2   Stock Info
  EBITDA Margin (%)                     25.2         17.8            7.4     19.9        5.3   Sector                                Oil & Gas
  Adj. PAT                               82           56            45.7       46       78.5   Market Cap (` cr)                           4,803
  Source: Company, Angel Research                                                              Beta                                          0.7
                                                                                               52 Week High / Low                        454/235
 Gujarat Gas’s (GGAS) 4QCY2010 numbers exceeded our expectations on the
                                                                                               Avg. Daily Volume                          24706
 bottom-line front, which increased 79% yoy to `82cr (`46cr) v/s our estimate of
                                                                                               Face Value (`)                                10
 `54cr. Gross spread spike to `5.4/scm during the quarter. We recommend an
                                                                                               BSE Sensex                                 18,447
 Accumulate on the stock.
                                                                                               Nifty                                       5,522
 Gross spread jumps on higher realisation and lower average gas cost: For                      Reuters Code                         GGAS.BO
 4QCY2010, GGAS reported top-line growth of 33% yoy to `514cr (`386cr) as                      Bloomberg Code                       GUJS@IN
 against our expectation of `488cr. Average realisations increased to `16.3/scm
 (`13.8/scm) during the quarter. Gross spread spiked to `5.4/scm during the
 quarter on account of higher realisation and lower cost of gas procured                       Shareholding Pattern (%)
 sequentially due to restart of PMT field after the shutdown, thus decreasing                  Promoters                                    65.1
 reliance on relatively costlier LNG volumes.                                                  MF / Banks / Indian Fls                       9.2
                                                                                               FII / NRIs / OCBs                            16.1
 Outlook and Valuation: GGAS volume during the quarter was supported by
                                                                                               Indian Public / Others                        9.6
 higher gas flow from PMT. Thus, reliance on RLNG decreased to an extent to
 support the company’s volume growth and margin. However, we expect the
 company to resort to RLNG for incremental growth, which would stabilise margins               Abs. (%)                   3m       1yr       3yr
 going forward. Besides volume growth, to maintain margins, the company plans
                                                                                               Sensex                    (7.1)    12.3      4.9
 to price its gas to its various consumers taking into consideration the pricing of the
                                                                                               GGAS                       3.3     57.2     138.3
 alternative fuels. We believe that through this strategy, the company will be able
 to maintain volume growth and margins going ahead. Thus, we recommend an
 Accumulate on the stock, with a Target Price of `418.

 Key Financials (Consolidated)
 Y/E Dec. (` cr)                        CY2009         CY2010E         CY2011E      CY2012E
 Net Sales                                1,420             1,849          2,122      2,438
 % chg                                         9.1           30.3           14.7       14.9
 Net Profit                               174.2             257.7          265.0      297.5
 % chg                                         8.4           48.0            2.8       12.3
 OPM (%)                                    19.7             22.5           20.6       19.9
 EPS (`)                                    13.6             20.1           20.7       23.2
 P/E (x)                                    27.6             18.6           18.1       16.1    Vinay Nair
 P/BV (x)                                      6.3            5.2            4.3        3.7    Tel: 022 - 3935 7800 Ext: 6816
 RoE (%)                                    23.6             30.4           26.0       24.6    vinay.nair@angelbroking.com
 RoCE (%)                                   24.4             33.2           29.3       27.9
                                                                                               Amit Vora
 EV/Sales (x)                                  3.1            2.3            2.0        1.6
                                                                                               Tel: 022 - 3935 7800 Ext: 6827
 EV/EBITDA (x)                              15.6             10.4            9.6        8.3
                                                                                               amit.vora@angelbroking.com
 Source: Company, Angel Research




Please refer to important disclosures at the end of this report                                                                               1
                                                                                    Gujarat Gas | 4QCY2010 Result Update



Exhibit 1: 4QCY2010 performance
Y/E December (` cr)               4QCY10   3QCY10        % chg (qoq)   4QCY09 % chg (yoy)             CY10       CY09       % chg (yoy)
Net Operating Income                 514         507            1.3          386        33.0          1849       1420              30.3
COGS                                 338         381          (11.2)         268        26.4          1286       1003              28.2
Total operating expenditure           46            36         27.4           42        10.5           147            137            7.5
EBITDA                               129            90         43.1           77        68.2           416            280          48.7
EBITDA Margin (%)                   25.2      17.8                           19.9                     22.5        19.7
Other Income                           8            5          55.1            6        23.0            22             27         (15.9)
Depreciation                          14            14          3.1           13        11.9            54             47          14.4
Interest                               0            0         100.0            0        61.8             0             0          238.7
PBT                                  123            82         50.6           70        74.3           383            259          48.2
PBT Margin (%)                      23.9      16.1                           18.2                     20.7        18.2
Total Tax                             40            25         61.1           24        66.5           124             84          48.7
% of PBT                            32.8      30.7                           34.3                     32.4        32.3
PAT                                   83            57         46.0           46        78.4           259            175          48.0
Minority interest                      0            0         174.3            0        72.1             1             1           48.4
Adj. PAT                              82            56         45.7           46        78.5           258            174          48.0
PAT Margin (%)                      16.0      11.1                           11.9                     13.9        12.3
Source: Company, Angel Research


                                           Exhibit 2: 4QCY2010 Actual v/s Estimates
                                           (` cr)                                        Estimates           Actual         Variation (%)
                                           Net Operating Income                                488             514                   5.2
                                           EBITDA                                               92             129                  40.5
                                           EBITDA Margin (%)                                   18.9           25.2                   6.3
                                           PBT                                                  83             123                  48.2
                                           Adj. PAT                                             54              82                  50.8
                                           Source: Company, Angel Research


                                           Top-line up 33% driven by higher realisations: For 4QCY2010, GGAS reported
                                           top-line growth of 33% yoy to `514cr (`386cr) as against our expectation of
                                           `488cr. Top-line growth was driven by increase in average realisations to
                                           `16.3/scm (`13.8/scm) during the quarter. Average realisations came in higher
                                           owing to the CNG price hike effected over the last one year and increase in price
                                           to the industrial retail customers. Realisations increased sequentially too due to
                                           similar reason.




March 1, 2011                                                                                                                           2
                                                      Gujarat Gas | 4QCY2010 Result Update



                Exhibit 3: Operating revenue growth trend

                         600                                                                    36.0
                                                  33.8                 30.7           33.0
                                                                                                32.0
                         500
                                                                                                28.0
                         400                                 23.4                               24.0
                                                                                                20.0




                (` cr)
                         300




                                                                                                       (%)
                                                                                                16.0
                                   16.7
                         200                                                                    12.0
                                                                                                8.0
                         100
                                                                                                4.0
                          -                                                                     -
                               4QCY09      1QCY10        2QCY10     3QCY10       4QCY10

                                 Operating Revenues           Operating Revenues growth (RHS)

                Source: Company, Angel Research

                RLNG off-take reduces sequentially on re-start of PMT field: Gas sourcing mix
                during the quarter saw lesser reliance on LNG, as supply from the PMT field
                increased due to re-start of its operations. Thus, reliance on LNG decreased to that
                extent to support its growth. However, on a yoy basis, gas distribution volumes
                grew on higher RLNG volume off-take. It increased by 12.8% yoy to 309mmscm
                (274mmscm). More than 8,800 vehicles were converted to CNG during the
                quarter, taking the total number of CNG vehicles now plying on natural gas in the
                company’s markets to more than 135,000.

                OPM expands by 527bp yoy and 737bp qoq to 25.2%: Sequentially, the
                company’s OPM expanded by 737bp to 25.2% (17.8%) mainly on account of the
                increase in the gross spread, which spiked to `5.4/scm during the quarter. This
                was on account of higher realisation and lower gas cost due to increase in the
                proportion of PMT gas procured during the quarter. We had assumed higher LNG
                off-take and thus gas cost was much lower than our expectation. Similarly, on yoy
                basis, OPM expanded by 527bp. Operating expenditure during the quarter
                increased 10.5% yoy to `46cr (`41.6cr), wherein staff costs moved up 16.7% yoy
                to `14.2cr (`12.2cr) and other operating expenditure increased 8.0% yoy to
                `31.8cr (`29.5cr). Thus, higher top-line and better operating performance resulted
                in EBITDA increasing by 68.2% yoy to `129.3cr (`76.9cr), which was higher than
                our expectation of `92cr.




March 1, 2011                                                                                           3
                                                                 Gujarat Gas | 4QCY2010 Result Update



                Exhibit 4: Operating performance trend
                         140                                                                              27.0
                                                                                               25.2
                         120                                                                              25.0
                                                          25.0
                         100
                                                                                                          23.0
                            80                                        22.3




                (` cr)
                                                                                                          21.0




                                                                                                                 (%)
                            60          19.9
                                                                                                          19.0
                            40                                                     17.8
                            20                                                                            17.0

                            -                                                                             15.0
                                     4QCY09       1QCY10          2QCY10      3QCY10       4QCY10

                                              Operating Profit             Operating Margins (RHS)

                Source: Company, Angel Research

                Depreciation, interest costs in line: Depreciation moved up 11.9% yoy to `14.2cr
                (`12.7cr) due to investments in the pipeline network, CNG and other infrastructure
                during the year. Since the company utilises internal cash accruals to meet its
                working capital requirements and for expansions, interest costs were negligible.

                Higher operating profit boosts PAT by a substantial 78.5%, beats our expectation:
                Other income increased 23% yoy to `7.7cr (`6.3cr), while the effective tax rate
                stood lower at 32.8% (34.3%). Thus, bottom-line increased by 78.5% yoy to `82cr
                (`46cr) and was much higher than our expectation of `54cr.


                Exhibit 5: PAT growth trend
                                90                                                                    90.0
                                                                                              79.0
                                80                                                                    80.0
                                70                        70.1                                        70.0
                                60                                                                    60.0
                   (` cr)




                                50                                                                    50.0




                                                                                                                 (%)
                                         43.4
                                40                                                                    40.0
                                30                                                27.2                30.0
                                20                                     21.7                           20.0
                                10                                                                    10.0
                                -                                                                     -
                                      4QCY09       1QCY10         2QCY10      3QCY10      4QCY10
                                                           PAT        PAT growth (RHS)

                Source: Company, Angel Research




March 1, 2011                                                                                                     4
                                                    Gujarat Gas | 4QCY2010 Result Update



                Investment Arguments
                Supply-side woes receding on improving domestic gas availability and LNG
                playing a crucial role: Over the last one year, the company registered steady
                growth in volumes following improving availability of gas in the country and
                subdued RLNG prices. Although there have been some delays in receiving gas
                from KG-D6 on account of slow ramp up of gas production, the company is
                ensuring that the shortfall in volume is compensated with higher RLNG
                procurement. It recently re-entered into a firm RLNG agreement with BG for the
                supply of 0.5mmscmd gas. The company continues to explore entering such long-
                term RLNG contracts. Moreover, increase in the domestic gas availability (RIL,
                along with BP, ramping up production from KG D6 from 50 to 80mmscmd) would
                further improve matters.

                Gross spread to stabilise: Gross spread during CY2009 edged higher as the
                company provided large proportion of its incremental gas to the high-margin
                industrial retail customers. Thus, the company's profitability has been improving
                with its focus shifting to the high-margin retail business from bulk customers
                (decreased from 30.1% in CY2006 to 13.1% in CY2008). Going ahead, we expect
                bulk volumes to be nil. We expect gross gas spread to stabilize going ahead as
                company is able to pass through its gas cost to industrial customers by pro-actively
                pricing it taking into account the pricing of alternative fuels.


                Outlook and Valuation

                GGAS volume during the quarter was supported by higher gas flow from PMT as
                the field re-started its operations following its shutdown. Thus, reliance on RLNG
                decreased to an extent to support the company’s volume growth and margin.
                However, we expect company to resort to RLNG for incremental growth, which
                would stabilise margins going forward. The company has also entered into a firm
                contract with BG to meet its growth requirements. The company continues to
                explore entering into such long-term RLNG contracts and thus soften the supply-
                side constraints. The company’s CNG segment has been clocking healthy growth
                and increasing its share in the volume matrix. More than 135,000 natural gas
                vehicles are now plying in the company’s markets.

                GGAS still awaits authorisation from the PNGRB for its areas of operations.
                However, to pursue growth it has bid for a new area within Gujarat under the third
                round of bidding conducted by the PNGRB. The same is currently under
                evaluation. Besides volume growth, to maintain margins, the company plans to
                price its gas to its various consumers taking into consideration the pricing of the
                alternative fuels. We believe that through this strategy, the company will be able to
                maintain volume growth and margins going ahead. At current levels, the stock is
                trading at 18.1x and 16.1x CY2011E and CY2012E earnings, respectively. We
                recommend an Accumulate on the stock, with a Target Price of `418, implying an
                upside of 11.6% from current levels.




March 1, 2011                                                                                      5
                                                                                                                                              Gujarat Gas | 4QCY2010 Result Update



                                               Exhibit 6: Key Assumptions
                                                 Particulars                                                                                                                                                     CY2011E                    CY2012E
                                                 Sales volumes (mmscm)                                                                                                                                                    1,358                      1,496
                                                 Blended Realisation (`/scm)                                                                                                                                              15.53                      16.23
                                                 Gas Purchase cost (`/scm)                                                                                                                                                11.14                      11.76
                                                Source: Company, Angel Research



                                               Exhibit 7: Angel EPS forecast v/s consensus
                                                                                                                                         Angel Forecast                      Bloomberg Consensus                                     Variation (%)
                                               CY2011E                                                                                                       20.7                                                    22.0                             (6.1)
                                               CY2012E                                                                                                       23.2                                                    24.6                             (5.6)
                                               Source: Company, Angel Research


Exhibit 8: Recommendation Summary
                                                                                                                                                                                  FY09-12E
                                              Target                      Upside                     Mkt Cap FY2012E                                  FY2012E                                                    FY2012E                    FY2012E
Company                    Reco   CMP (`)                                                                                                                                          CAGR in
                                             Price (`)                       (%)                        (` cr) P/BV (x)                                 P/E (x)                                                  RoCE (%)                    RoE (%)
                                                                                                                                                                                    EPS (%)
Cairn India              Reduce        343            312                      (8.9)                  65,141                             1.4                        7.9                    119.7                           19.3                      19.4
GAIL                        Buy        445            530                      19.1                   56,459                             2.5                    13.3                           16.1                        22.9                      19.8
GSPL                Accumulate          93            105                      12.7                      5,240                           2.2                        9.8                        62.9                        22.5                      24.7
Gujarat Gas         Accumulate         375            418                      11.6                      4,803                           3.7                    16.1                           19.5                        27.9                      24.6
IGL                         Buy        295            345                      17.1                      4,123                           3.4                    13.9                           17.1                        36.6                      26.7
ONGC                        Buy        274            350                      27.9                  234,206                             1.7                        8.5                        11.7                        24.3                      21.7
Petronet LNG            Neutral        117                        -                     -                8,767                           2.9                    13.8                             6.9                       16.1                      22.5
RIL                         Buy        989     1,160                           17.3                  323,655                             1.7                    13.2                           14.2                        11.1                      13.2
Shiv-vani Oil               Buy        295            539                      83.0                      1,365                           0.8                        5.5                        14.5                        14.0                      18.4
Source: Company, Angel Research


                                               Exhibit 9: One-year forward P/E
                                                                  500

                                                                  400
                                                Share Price (`)




                                                                  300

                                                                  200

                                                                  100

                                                                      -
                                                                                            Sep-05




                                                                                                                       Sep-06




                                                                                                                                                  Sep-07




                                                                                                                                                                             Sep-08




                                                                                                                                                                                                        Sep-09




                                                                                                                                                                                                                                   Sep-10
                                                                                   May-05




                                                                                                              May-06




                                                                                                                                         May-07




                                                                                                                                                                    May-08




                                                                                                                                                                                               May-09




                                                                                                                                                                                                                          May-10
                                                                          Jan-05




                                                                                                     Jan-06




                                                                                                                                Jan-07




                                                                                                                                                           Jan-08




                                                                                                                                                                                      Jan-09




                                                                                                                                                                                                                 Jan-10




                                                                                                                                                                                                                                            Jan-11




                                                                                               Share Price                               6x                     9x                      12x                       15x                        18x

                                               Source: Company, Angel Research




March 1, 2011                                                                                                                                                                                                                                             6
                                                    Gujarat Gas | 4QCY2010 Result Update



                Profit & Loss Statement (Consolidated)
                Y/E December (` cr)               CY07    CY08     CY09    CY10    CY11E   CY12E
                Gross sales                       1,229   1,293    1,409   1,842   2,116   2,437
                Less: Excise duty                   15       19      22      28       33      38
                Net Sales                         1,214   1,274    1,387   1,814   2,084   2,399
                Other operating income              31       27      33      36       38      39
                Total operating income            1,245   1,301    1,420   1,849   2,122   2,438
                % chg                              28.5     4.5      9.1    30.3    14.7    14.9
                Total Expenditure                  993    1,066    1,140   1,434   1,684   1,953
                Net Raw Materials                  879     934     1,003   1,286   1,513   1,760
                Other Mfg costs                     12       16      20      26       31      36
                Personnel                           31       41      45      50       59      68
                Other                               71       75      72      71       81      88
                EBITDA                             251     235      280     416      437     485
                % chg                              68.3    (6.4)    18.8    48.7     5.2    11.0
                (% of Net Sales)                   20.2    18.1     19.7    22.5    20.6    19.9
                Depreciation& Amortisation          38       42      47      54       62      67
                EBIT                               213     193      232     361      375     418
                % chg                              81.3    (9.1)    20.0    55.7     3.7    11.5
                (% of Net Sales)                   17.1    14.9     16.4    19.5    17.7    17.1
                Interest & other Charges             0        0       0       0        1       1
                Other Income                        17       41      27      22       25      31
                (% of PBT)                          7.6    17.6     10.3     5.8     6.3     6.9
                Share in profit of Associates         -        -       -       -       -       -
                Recurring PBT                      230     235      259     383      399     448
                % chg                              75.3     1.9     10.3    48.2     4.1    12.3
                Extraordinary Expense/(Inc.)          -        -       -       -       -       -
                PBT (reported)                     230     235      259     383      399     448
                Tax                                 77       73      84     124      133     149
                (% of PBT)                         33.3    31.1     32.3    32.4    33.2    33.2
                PAT (reported)                     154     162      175     259      266     299
                Add: Share of earnings of asso.       -        -       -       -       -       -
                Less: Minority interest (MI)         1        1       1       1        2       2
                Prior period items                    -        -       -       -       -       -
                PAT after MI (reported)            153     161      174     258      265     297
                ADJ. PAT                           153     161      174     258      265     297
                % chg                              74.6     5.0      8.4    48.0     2.8    12.3
                (% of Net Sales)                   12.3    12.3     12.3    13.9    12.5    12.2
                Basic EPS (`)                      11.9    12.5     13.6    20.1    20.7    23.2
                Fully Diluted EPS (`)              11.9    12.5     13.6    20.1    20.7    23.2
                % chg                              74.6     5.0      8.4    48.0     2.8    12.3




March 1, 2011                                                                                  7
                                               Gujarat Gas | 4QCY2010 Result Update



                Balance Sheet (Consolidated)
                Y/E December (` cr)             CY07    CY08    CY09    CY10E    CY11E   CY12E
                SOURCES OF FUNDS
                Equity Share Capital              13      13      28       28       28      28
                Preference Capital                14      14      14       14       14      14
                Reserves& Surplus                560     697     738      904    1,078   1,284
                Shareholders Funds               588     725     780      946    1,120   1,326
                Minority Interest                  4       4       5        6        8      10
                Total Loans                      112     127     155      164      179     195
                Deferred Tax Liability            45      50      56       63       73      84
                Total Liabilities                748     906     996    1,180    1,380   1,614
                APPLICATION OF FUNDS
                Gross Block                      710     767     914    1,019    1,134   1,244
                Less: Acc. Depreciation          248     285     333      387      450     517
                Net Block                        462     482     581      632      684     727
                Capital Work-in-Progress         111     134     136      166      196     231
                Goodwill                            -       -       -        -       -       -
                Investments                      235     356     448      448      448     448
                Current Assets                   166     175     179      302      472     672
                 Cash                             18      22       8       71      189     358
                 Loans & Advances                 34      25      26       37       45      49
                 Other                           115     128     145      195      238     266
                Current liabilities              228     241     348      368      420     464
                Net Current Assets               (62)    (66)   (168)     (66)      52     208
                Mis. Exp. not written off          2       0       0        0        0       0
                Total Assets                     748     906     996    1,180    1,380   1,614




March 1, 2011                                                                                8
                                               Gujarat Gas | 4QCY2010 Result Update



                Cash Flow Statement (Consolidated)
                Y/E December (` cr)              CY07 CY08 CY09 CY10E CY11E CY12E
                Profit before tax                 230     235     259     383     399     448
                Depreciation                       38      42      47      54      62      67
                Change in Working Capital            5     12     (30)    (10)      1      12
                Less: Other income                (13)    (25)    (21)    (22)    (25)    (31)
                Direct taxes paid                 (73)    (57)    (78)   (118)   (123)   (138)
                Cash Flow from Operations         187     206     178     287     315     358
                (Inc.)/ Dec. in Fixed Assets      (92)    (90)   (152)   (135)   (145)   (145)
                (Inc.)/ Dec. in Investments      (109)   (126)    (63)       -       -       -
                Other income                       13      23      18      22      25      31
                Cash Flow from Investing         (187)   (192)   (197)   (113)   (120)   (114)
                Issue of Equity                      -       -       -       -       -       -
                Inc./(Dec.) in loans               22      15      28       9      15      15
                Dividend Paid (Incl. Tax)         (20)    (24)    (24)   (121)    (91)    (91)
                Cash Flow from Financing             1     (9)      4    (112)    (76)    (76)
                Inc./(Dec.) in Cash                  1      5     (15)     63     119     168
                Opening Cash balances              16      18      22       8      71     189
                Closing Cash balances              18      22       8      71     189     358




March 1, 2011                                                                                9
                                                         Gujarat Gas | 4QCY2010 Result Update




                Key Ratios
                Y/E December (` cr)                        CY07    CY08    CY09 CY10E CY11E CY12E
                Valuation Ratio (x)
                P/E (on FDEPS)                             31.4    29.9    27.6     18.6     18.1     16.1
                P/CEPS                                     25.1    23.7    21.7     15.4     14.7     13.2
                P/BV                                        8.4     6.8     6.3      5.2      4.3      3.7
                Dividend yield (%)                          0.4     0.4     2.1      1.6      1.6      1.6
                EV/Sales                                    1.7     1.6     3.1      2.3      2.0      1.6
                EV/EBITDA                                   8.6     8.6    15.6     10.4      9.6      8.3
                EV/Total Assets                             2.9     2.2     4.4      3.7      3.0      2.5
                Per Share Data (`)
                EPS (Basic)                                11.9    12.5    13.6     20.1     20.7     23.2
                EPS (fully diluted)                        11.9    12.5    13.6     20.1     20.7     23.2
                Cash EPS                                   14.9    15.8    17.3     24.3     25.5     28.4
                DPS                                         1.5     1.5     8.0      6.0      6.0      6.0
                Book Value                                 44.5    55.3    59.7     72.6     86.2    102.3
                Dupont Analysis (%)
                EBIT margin                                17.1    14.9    16.4     19.5     17.7     17.1
                Tax retention ratio                        67.1    69.3    67.7     67.6     66.8     66.8
                Asset turnover (x)                          1.9     1.6     1.5      1.8      1.8      2.0
                ROIC (Post-tax)                            21.8    16.6    16.8     23.3     21.8     22.8
                Cost of Debt (Post Tax)                        -       -       -        -        -        -
                Leverage (x)                                   -       -       -        -        -        -
                Operating ROE                              21.8    16.6    16.8     23.3     21.8     22.8
                Returns (%)
                ROCE (Pre-tax)                             31.7    23.4    24.4     33.2     29.3     27.9
                Angel ROIC (Pre-tax)                       39.0    28.3    29.0     40.2     38.7     41.4
                ROE                                        30.2    25.1    23.6     30.4     26.0     24.6
                Turnover ratios (x)
                Asset Turnover (Gross Block)                1.9     1.8     1.7      1.9      2.0      2.1
                Inventory / Sales (days)                    4.6     5.0     5.0      4.8      5.2      5.2
                Receivables (days)                         25.1    25.7    27.0     26.2     29.1     29.4
                Payables (days)                            66.0    63.1    61.7     56.4     59.1     59.9
                Working capital cycle (ex-cash) (days)    (23.9) (23.5) (34.0)     (30.9)   (23.6)   (21.5)
                Solvency ratios (x)
                Net debt to equity                         (0.4)   (0.5)   (0.6)    (0.5)    (0.6)    (0.6)
                Net debt to EBITDA                         (1.0)   (1.6)   (1.5)    (1.2)    (1.4)    (1.6)
                Interest Coverage (EBIT/Interest)         2,008 1,743 1,707         782      417      418




March 1, 2011                                                                                           10
                                                                                         Gujarat Gas | 4QCY2010 Result Update


  Research Team Tel: 022 - 3935 7800               E-mail: research@angelbroking.com                    Website: www.angelbroking.com

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 Disclosure of Interest Statement                                              Gujarat Gas
 1. Analyst ownership of the stock                                                 No
 2. Angel and its Group companies ownership of the stock                           No
 3. Angel and its Group companies' Directors ownership of the stock                No
 4. Broking relationship with company covered                                      No

 Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.



 Ratings (Returns):              Buy (> 15%)                      Accumulate (5% to 15%)                 Neutral (-5 to 5%)
                                 Reduce (-5% to 15%)              Sell (< -15%)


March 1, 2011                                                                                                                             11

				
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